Defendants failed to present a viable defense; allegations of collusion were unsubstantiated and deemed illusory, warranting denial of leave to defend under Order XXXVII of the CPC.

JUDGMENT (Oral)

1. The impugned order dated 13th July, 2020, passed by the learned Additional District Judge ("the learned ADJ") allows the application of the respondent for leave to defend Suit 827/2018, filed by the petitioner-Siria International under Order XXXVII of the Code of Civil Procedure, 1908 (CPC).

Facts

2. The petitioner-plaintiff ("Siria", hereinafter) alleges, in its plaint before the learned ADJ, that the defendants had induced and allured Siria to invest Rs.25 lakhs in the defendant company M/s Green Ventures Securities Pvt. Ltd. ("Green Ventures", hereinafter), believing which Siria transferred an amount of Rs.25 lakhs to respondent-Defendant 1, Nitin Jain, by way of Real-Time Gross Settlement (RTGS).

3. Siria alleges that the defendants had assured return of the principal amount of Rs.25 lakhs on or before 14th November, 2018, and also assured a return of 1% on the total amount invested. In breach thereof, Siria alleges in its plaint, the defendants tendered, to Siria, three cheques, of which two were of Rs.75,000/- each and one was of Rs.40,000/- respectively and transferred an amount of Rs.1 lakh to Siria, through National Electronic Funds Transfer (NEFT).

4. Additionally, the plaint alleges that the defendant had handed over, to Siria, an undated cheque bearing no. 499666, drawn on HDFC Bank, F-38, Kirti Nagar, New Delhi-110015, for Rs.25 lakhs.

5. Mr. Nikhil Malhotra, learned Counsel for Siria, has pointed out, from the account statement of Siria, that, in fact, on 14th November, 2014, Rs.25 lakhs was transferred from the account of Siria to the account of the respondent and that, on 25th November, 2014 and 26th February, 2015, Rs.75,000/- and Rs.40,000/- were credited into the same account of Siria by the respondent. Mr. Malhotra points out that, in the application filed by them for leave to defend, there was no denial, by the respondent, of the aforesaid payments credited into the account of Siria, or of the further transfers of Rs.75,000/- and Rs.1 lakh from the respondents to Siria on 29th April, 2015 and 7th July, 2015 respectively.

6. The plaint further alleged that, at the request of the defendant, Siria presented the cheque for Rs.25 lakhs on 6th November, 2015, but that the cheque was dishonoured with the remark "insufficient funds".

7. Repeated requests to the respondents to liquidate the amount due to Siria having met with no success, Siria chose to file Suit 827/2018, before the learned ADJ, under Order XXXVII of the CPC, seeking a decree against the defendant for an amount of Rs.25 lakhs along with interest with effect from 5th December, 2015 and pendente lite and future interest @ 12% per annum till realisation, and costs.

8. Summons for judgment were issued, by the learned ADJ, whereupon the respondent filed an application seeking leave to defend the suit.

9. The respondent, in its application for leave to defend, denied any direct financial transaction with Siria.

10. It was further pointed out, in the application seeking leave to defend, that Siria had not indicated the particulars of the scheme under which it had invested money with the defendant. In fact, submitted the application for leave to defend, the defendants were dealing in shares and commodities in the stock market and had, in this connection, interacted with one Jitendra Bhanthia and his son Shreyansh Bhanthia, who used to trade in shares and commodities through the Demat account of Green Ventures. Gro